Apple to Incentivize Larger Production of iPhone 6 Plus Devices by Paying Foxconn More

[dgstorm]

It's an economic truism that if you want more of something, you will probably need to pay more to get it. This is as true for big corporations as it is for us consumers. Apple plans to incentivize Foxconn to product even more iPhone 6 Plus smartphones by paying them 20-25% more in an effort to get them to improve the “mass production efficiency for the device.”

Apparently, demand for the iPhone 6 Plus was a bit higher than Apple expected and supply is falling a bit behind. Here's a quote with more of the details,

Seeing higher-than-expected iPhone 6 Plus demand, Apple is rumored to be considering raising its payments to Foxconn Electronics (Hon Hai Precision Industry) by 20-25% to encourage the Taiwan-based EMS provider to accelerate mass production efficiency for the device, according to sources from the upstream supply chain. Foxconn declined to comment.

Foxconn is estimated to be charging US$20 for each iPhone 6 Plus made. If the rumors are true, the fee would rise to US$24-25, which would significantly boost Foxconn's revenues in the fourth quarter, the sources said.

However, quotes will gradually return to original levels in the long term as Foxconn's production capacity and yield rates increase, the sources added.

This is one of the first times we have ever reported Apple willing to fork out more funds to ramp up production of a device.

Source: DigiTimes